Nearly 2,000 housing projects comprising 5.08 lakh units are stalled across 42 cities in the country, mainly due to financial mismanagement by developers and lack of execution capabilities, according to data analytic firm PropEquity.
As per the PropEquity data, there are 1,981 residential projects that are stalled totalling 5.08 lakh units. Of these stalled projects, as many as 1,636 projects totalling 4,31,946 units are in 14 tier I cities, while 345 projects totalling 76,256 units are in 28 tier II cities.
It also pointed out that the number of stalled units rose to 5,08,202 from 4,65,555 units in 2018.
"The problem of stalled projects and the subsequent rise is due to the lack of execution capabilities of developers, cash-flow mismanagement and diversion of funds to buy new land banks or retire other loans," said Samir Jasuja, founder and chief executive officer at PropEquity.
He stressed on the need to provide independent third-party audit services for homebuyers to empower them to make an informed decision about the developers' capabilities to complete the project on time.
To address the issue of stalled projects, the government had launched the Special Window for Affordable and Mid-Income Housing Fund in November 2019.
In the last five years, around 32,000 units have been completed and the SWAMIH fund aims to deliver 20,000 homes every year for the next three years, PropEquity said.
PropEquity data showed that Greater Noida in tier I with 74,645 units and Bhiwadi in tier II with 13,393 units have maximum number of stuck units.
Gurugram has 158 stalled projects having 52,509 units; Noida (103 projects 41,438 units); Ghaziabad (50 projects 15,278 units); Faridabad (16 projects, 7,060 units); and New Delhi (1 project 900 units).
In Mumbai Metropolitan Region, Mumbai has 234 stalled projects having 37,883 units, while Navi Mumbai (125 projects 28,466 units) and Thane (186 projects 57,520 units). Pune has 172 stalled projects comprising 24,129 units.
Bengaluru has 225 stalled projects comprising 39,908 units; Kolkata (82 projects 24,174 units); Chennai (92 projects, 21,867 units); and Hyderabad (25 projects, 6,169 units).
"Real estate disputes in various courts have been rising. To add to this, the backlog of stalled projects and the addition of new ones have put the onus on homebuyers to do their due diligence through professional experts before buying a house," Jasuja said.
Among tier II cities, PropEquity data showed that Bhiwadi has 13,393 stuck units in 33 stalled projects), Lucknow (13,024 units in 48 projects); Jaipur (9,862 units in 37 projects); and Bhopal (7,500 units in 27 projects).
PE Analytics Ltd. owns and operates PropEquity. PropEquity captures real estate data for RERA approved projects in 44 Indian cities including 14 tier I cities and 30 tier II cities.
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